The Malta Independent 6 May 2024, Monday
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The big deal about no deal

Jesmond Saliba Sunday, 18 November 2018, 09:36 Last update: about 6 years ago

We are now less than 20 weeks away from Brexit, and the possibility of the United Kingdom dropping out of the European Union without having secured a deal with Brussels is a growing possibility. The invocation of Article 50 last year triggered a countdown to 29 March 29 2019, which is when the UK will automatically cease to be a member of the Union. Negotiations have been anything but smooth and, as things stand, there is little to suggest that the situation will be any less complicated after the UK formally exits the bloc.

European cooperation has sunk so deeply in the way member states and their citizens interact that it is not immediately clear what a no-deal scenario could be like. Legalistically, unless an agreement with Brussels is reached in time, Britain will become a third country and its relationship with the EU will be governed in accordance with WTO regulations.

The implications of this would be sudden and tangible and one could argue that, in such circumstances, there is as much control to be taken back as given up. From commerce and the economy, to mobility and roaming, the effects of a no-deal Brexit run wide and deep.

All imports and exports would be subjected to Customs controls. Today, it takes a trailer carrying goods across the Channel only a couple of minutes to go through Dover, but if the UK leaves the Customs Union, border checks will have to be re-established to inspect cargo to and from the EU. It has been reported that London is making plans to transform highways into parking lots for trucks, anticipating long processing times.

The situation 900 kilometres to the north-west, however, would be even more tricky, as Ulster in Ireland would turn into a physical border overnight. Every day, about 30,000 people cross into what is effectively an open demarcation line between Northern Ireland and the Republic of Ireland. Most parties involved in the negotiations want to avoid erecting a hard border in the area, which many consider a reversal of the Good Friday Agreement and could spill over into political tensions.

Failure to produce a deal in time would leave Europeans living and working in the UK in limbo. There are currently three million non-British EU citizens in the UK, and although the City of London unilaterally said it would protect their interests, a no-deal situation would see them lose their rights to permanent residence and automatic access to the National Health Service. A visa system could be reinstated and roaming charges for calls in the UK, completely abolished this year, could be re-introduced.

Analysts have warned that failure to secure a deal with the EU would cause prices to soar, partly due to a predicted fall in the value of the Sterling – which some believe could slump by as much as 15 per cent. Retail chain Sainsbury’s is said to be bracing itself for delays in supplies, raising worries in the retail sector about shortages and empty shelves. Economists estimate that new Customs controls could cost Britain 800,000 jobs and, consequently, shave six percentage points off the country’s GDP.

Air travel is also in for a turbulent patch as flights between the EU and UK could be grounded after March 2019. Today, travel is regulated by the European Aviation Security Agency but there are no equivalent arrangements in the WTO framework. There has been talk of emergency agreements, but if these are not reached in time, flights will have to be suspended. Thomas Cook has already updated its policy, informing customers that the company cannot be held responsible for disruptions caused by the closure of airspace after Brexit.

If the UK leaves the EU without a formal agreement, its citizens will wake up on 30 March in a radically different world from the one in which they will have gone to sleep the night before. After the mist of ideological triumphalism settles, a no-deal scenario would still require the British government to establish new ways of working with the EU.

 

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